Dear Marketers, Stop Using Covertly Acquired Third-Party Data


Share on LinkedIn

A multi-billion dollar industry, data brokering is the buying and selling of consumer data — a poor practice that has gone decades without regulation. As this consumer information is seemingly invaluable to marketing efforts, marketers have heavily relied on it to carry out their email campaigns. Unfortunately, this data is often outdated, inaccurate and obtained using questionable practices.

As a result, the recipient of an email created using third-party data almost always ends up with an irrelevant message — and certainly more annoyed than delighted at having received it. According to a recent survey, 30 percent of U.S. consumers receive between one and three irrelevant messages per day, and 17 percent of U.S. consumers receive more than 10 per day. These messages likely end up deleted or flagged as spam, translating to billions of wasted marketing dollars every year.

Annoyance with these emails is one thing, but when marketing tactics don’t abide by basic privacy rights, it’s an entirely different problem. Data brokers capture billions of individual data points about consumers — without clear permission. Nearly every consumer-facing business is guilty of buying data from third-party sources. Unfortunately, the average consumer has no idea that his or her personal details are up for sale. Prompted by consumer outrage over blatant privacy violations, the government has now set the FTC loose to investigate the buying and selling of personal information.

So, with the business and potential legal perils of surreptitious data-capture methods exposed, we truly could be nearing the end of the line of brands’ reliance on third-party consumer data. How, then, will marketers be able to reach their intended targets and, ideally, personalize their communications with their customers? Is there a way to capture accurate personal information while still complying with privacy rights and standards?

Many brands are already finding the answer to these questions by using first-party data as the foundation of their marketing efforts. What does that mean? First-party data includes everything consumers choose to reveal about themselves, from basic details like their names, email addresses and zip codes to deeper profile data, such as interests, occupation and relationship statuses from their social network accounts. Altogether, this information comprises a consumers’ digital identities. People use their identities online every day: Every time consumers fill out registration forms or authenticate using existing social profiles, they’re using these digital identities and freely offering information about themselves.

With customers’ identities verified through the responsible collection of first-party data taken directly from the source — whether that’s through social login or customized, progressive registration flows — brands can personalize communications with each consumer at every touch point. For example, if consumers register with a brand using their identities from Facebook, the business can tailor email offers according to the pages the consumers “like” on the social network. Or, the identity data can be used to customize consumers’ entire website experiences with product or content recommendations that appeal to their preferences.

With first-party, permission-based identity data at the center of brands’ marketing strategies, marketers will finally have the intelligence they need to produce hyper-relevant communications, achieve higher conversion rates and ensure they aren’t violating their customers’ basic privacy rights. In addition, consumers can finally have some peace of mind about their data privacy as dependence on the buying and selling of third-party data dwindles.

Reeyaz Hamirani
With a background in market research, data analysis and digital marketing, Reeyaz Hamirani is the Head of Corporate Communications at Gigya, the leading customer identity management platform with more than 700 global enterprise customers, including Fox, Forbes and Verizon. When he's not evangelizing the importance of digital identity management, Reeyaz enjoys immersing himself in all things football, learning about investment methodology and traveling with his family.


  1. Hi Reeyaz

    It is generally not illegal to collect, collate and sell third-party data for use in marketing. Nor is it illegal to use it. Where it provides marketers with an information advantage they would be fools not to use it. As expected, marketers have long been avid users of this data, whether through segmented lists provided by traditional data brokers or more recently, individual impressions provided in real-time by digital programmatic platforms.

    I agree with you entirely about the value of customer provided information. I would much prefer for customers to tell me about their preferences, to tacitly give me permission to use data about them and particularly, for them to tell me about their future intentions. But this degree of disclosure takes time to develop and then only after building a trusted working relationship. Becoming a customer-focused organisation like this is both difficult and expensive in a company of any size, particularly publicly-traded ones with quarterly targets to hit. And so marketers reach to third-party data to target customers for short-term communications.

    It is perhaps a little unrealistic to suggest that this is likely to change significantly in the near future, FTC investigation or not. There is simply too much highly profitable business and its associated jobs at stake for that to happen.

    Graham Hill

    PS. You may be interested in Ctrl-Shift’s forthcoming one-day conference on ‘Personal Information Economy 2015: Growth Through Trust, The rise of Me2B commerce’
    It covers the things you are talking about in some detail

  2. Hey Reeyaz
    Excellent article I must say! The internet age has bestowed on us humongous amounts of data. 81 percent of marketers who experienced an impressive return on data investments gave credit to their use of first party data while 49 percent mentioned their intent to increase their use of first party data. With that being said, there is no denying the value first party data commands and that is why first party data should be businesses’ first consideration rather than third party data.
    Bonny Jones


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here